The Benefit of Living Wills

When the time comes, wouldn't you love to save your loved ones from any unnecessary trauma and expense? It's a wise choice to take time to plan ahead for the day when you might not be able to make any more choices on your own behalf. Living wills can quickly be created without the help of a lawyer. They make your choices and desires known when you can't and so you're family won't have to.

But living wills are not your last will and testament. It doesn't involve issues like probate or distributing your assets to your family or friends. They are also called advance directives and are primarily used to either express your wishes if you are incapacitated or to appoint someone to speak on your behalf. Simply put, this person or the form itself speaks for you - fulfilling your wishes if you become unconscious or terminally ill.

How are living wills created?

The forms can be found for each individual state. It's important to make it apply to the state you are a legal resident of, in order to comply with that state's law. These forms may also be obtained from your family doctor. This form may need to be witnessed by two people and it may also require notarization.

One of the most important aspects of this vital form is who you choose as your representative. They don't need to be related to you, but they certainly should be trustworthy. It's also helpful, but not necessary, for this person to live generally in the same area as you for close proximity in case of emergency.

Another great aspect of this form is for expressing your desire to be an organ donor and for your final arrangements. But, you are not locked into your decisions until you become permanently unconscious which must be determined by a medical expert. Up until that time, you still have the power to change your mind from the time of the form's creation.

Make sure you give a copy of your advance directive form to your representative, your physician, any other healthcare providers and any other family members or friends who may become involved.

Some of the medical options you will need to choose are the following situations. All of these are on a "as-needed" basis.

1. If CPR should be performed.

2. If you should receive oxygen.

3. If you should be kept alive through artificial feeding and hydration.

4. If you should need dialysis.

5. If you should need pain medicines.

It's not possible to cover every single aspect of living wills in this article, but I hope to have given you some food for thought.

Peace of mind is what you will receive - for you and your loved ones. Remember, they will already be going through a tremendous amount of suffering if this time comes in your life. You will want to make some easy choices now in order to save them more difficult ones later.


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The Positives and Negatives Of A Power Of Attorney

Having a power of attorney in place can make life easier in many circumstances. Of course there are the positives and negatives to having an attorney in fact. Considering both the positives and negatives of having an attorney in place, can make the decision a lot easier in the end. As well as considering who to choose for the attorney as well. This is just as important of a decision and making sure that the person chosen will follow through with the principles wishes and desires is crucial, as well as ensuring that there are fewer problems and complications later on when the attorney becomes effective.

The Advantages to having an attorney in place are:

• The legal document is inexpensive and easy to draw up. Establishing a power of attorney is not expensive and can be done very easily whenever necessary.
• The principle is than able to have some control over who will be making decisions for them in the event that they become incapacitated. They can have the document drawn up to be very specific with exactly what the powers are and are not. As well as making sure that their every wish is handled to their liking too.
• The powers that are granted can be general or again very specific. It can also state when the power becomes effective too or whether it becomes effective when incapacitated. The document can have every detail added to it and cover what can and can not be handled by the agent.
• The document can also ask that the agent be bonded or that they have to give an account of their actions periodically to the courts. The attorney in fact can be required to show and keep track of all transactions and report back to the courts as often as monthly, bi-yearly or any other way that the principle requires to account for any and all actions they have performed.

The Disadvantages of having an attorney in place are:

• A principle can be questioned later on their own competence when they completed the power of attorney form. They may need to show competency later on that at the time they were able to complete the form.
• There are times that some financial institutions require that the form be completed on special forms and in a specific way to be valid with that institution.
• Occasionally some institutions will not recognize a power form after it has already been in effect for six months to a year. Occasionally, the form does have to be updated with these companies to remain valid.
• When the powers that have been granted to the agent are to general, abuse can occur.
• An agent can turn out not to be as trustworthy as once thought.

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Your Family Needs You to Have a HIPAA Release Form

While privacy is obviously something we think that we want more of, many have had the problem of obtaining the cooperation of health care providers to give out personal information when a loved one is ill. This is not only a problem when we attempt to assist elderly family members, but also college age "children." That's right; you might think of your 18 year old as a child, but the law considers him or her to be an adult.

Privacy requirements are imposed by law. While California has its own privacy statute, the principal federal law is the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").

Many do not realize that in some circumstances a healthcare provider is not required to discuss healthcare decisions or conditions with even the patient's spouse. For example, a recent publication of the Department of Health and Human Services makes it clear that, under HIPAA, hospitals and doctors are not required to communicate information even to close family members when the patient is unconscious. Doctors and hospitals have wide discretion based upon what they see as the "best interests" of the patient (whatever that means).

For example, that DHHS publication states: "If the patient is not present or is incapacitated, a health care provider may share the patient's information with family, friends, or others as long as the health care provider determines, based on professional judgment, that it is in the best interest of the patient." (Bold emphasis mine.)

Here are some specific examples from the same DHHS publication:

"o A surgeon who did emergency surgery on a patient may tell the patient's spouse about the patient's condition while the patient is unconscious.

o A pharmacist may give a prescription to a patient's friend who the patient has sent to pick up the prescription.

o A hospital may discuss a patient's bill with her adult son who calls the hospital with questions about charges to his mother's account.

o A health care provider may give information regarding a patient's drug dosage to the patient's health aide who calls the provider with questions about the particular prescription." (Bold emphasis mine.)

This is legal language. "May" means discretionary. "Shall" is mandatory. In summary: They don't have to tell you anything. It behooves all of us to make sure that we all sign HIPAA release forms authorizing the disclosure of private medical information of our close family members in case of an emergency.

You should contact an attorney to assist you in preparing a HIPAA release form, as part of an overall estate plan. Having a release may help you persuade reluctant healthcare providers to provide the information you need to make informed decisions about your loved one.

Disclaimer: The information in this article is not legal advice, and the use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on this article or any links from this article is expressly disclaimed. This article is not to be acted upon as if it were legal advice, and is subject to change without notice, or may include obsolete or dated information, or information not relevant to your jurisdiction. If you require legal services, you should consult with an attorney.

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Specific Powers Of Attorney

There are specific power of attorney that can be given to a person or company to handle the principle's affairs. Within these specific powers, there are three that are very commonly used. These are special powers, durable powers and durable health care powers.

Special Powers

Special powers is when a person is appointed to follow through on a specific task. Once the task has been completed, the power is no longer in effect. The tasks that can be completed using a special agent can include, but are not limited to: 

• Borrowing money.
• Debt collecting.
• Having access to safe deposit boxes.
• Able to handle banking transactions of all natures.
• Able to handle government issues.
• Decisions regarding the estate including gifting.
• Handling financial decisions.
• Handling business affairs.
• Managing and dealing with real estate issues.
• Dealing with real estate mortgages.
• Handling personal property sales.
• Real estate sales.

Durable Powers

Durable powers let family members handle the principle's financial dealings without going through the courts. Many times there may be a spouse, however since they are incapacitated, they may have limited rights to make decisions when there is joint property and finances. The financial powers that can be granted can include, but are not limited to: 

• The claiming of any inheritance and other property.
• Collecting social security and medicare benefits.
• Pay and file taxes.
• Hiring lawyers and court representatives.
• Handling the investing of stocks, bonds, and mutual funds.
• Handling and managing the principle's business affairs.
• Handling and managing any property.
• Handling and managing any and all retirement accounts.
• Handle and manage transactions at the bank and any other financial institutions.
• Pay bills and expenses.
• Buy and sell annuities and insurance policies.

Durable Health Powers

Durable health powers is considered an advanced medical directive, since there are instructions within the document detailing what the principle wants to have done once they become incapacitated. The durable health powers do not become active until the principle has become incapacitated. Up until that point, the principle is still in control of their own medical decisions. The majority of states do allow principles to put in the documents that they do not want life sustaining procedures in the event of a terminal illness. However, regardless of what is in the power document, the appointed agent should still clearly understand what the principle wants when it comes to medical preferences.

Keep in mind, that the principle can clearly define and specifically state exactly what powers they are granting to the agent. The more specific the document is, the better. This helps to limit any confusion or issues that could arise once the principle has become incapacitated. 

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What Does Durable Power Of Attorney Mean?

A durable power of attorney encompasses the other four types of power of attorney. They are a general, special or health attorney. Within the document that is signed by you and the other party that will be acting as your attorney, there are provisions the have special durability. For instance, when there is a durable power of attorney and you become mentally incompetent, if the document is already in effect it will then stay in effect.

A durable power of attorney is also used to prepare for the event of something possibly happening to you. The document is so that in the event that you are physically or mentally indisposed due to an accident or illness, there will be an attorney that can then handle your affairs. However, it will not go into effect unless a doctor certifies that you are mentally incompetent or incapacitated.

Choosing who will have the power in the case of an emergency is important and should be someone you trust and who will look out for your best interests. A lawyer does not need to be the agent, it can be any family, friend or organization that you choose. Whoever is chosen will be acting on your behalf. They will be making decisions that pertain to your business, health, financial obligations and possibly many other situations. These can include the care you receive or the properties that are bought or sold. The person or organization chosen, needs to be a person or organization that will not abuse the power that has been given to them.

Any agent acting on your behalf can only be held accountable when they have knowingly and purposefully engaged in misconduct in reference to your estate, business, health care or other financial obligations or investments. If they do something wrong that is done unknowingly, they will not be held accountable since it was not intentional. Many times this type of wording is added to the legal document, so that a person or organization is willing to take the responsibility of being the agent. Also, an agent does receive compensation for being so. There is no financial incentive for taking on the agent position.

Furthermore, there may be times that a successor agent may need to be appointed. This can occur when the person or organization refuses to be the agent. A successor agent can also be appointed in the case when the original agent can not take on the responsibility. For example, you have appointed an agent and have become ill and mentally incompetent. However, the agent has also become ill and incompetent. A successor agent is then appointed in this situation. It is a good idea to name one in the case of an unexpected event.


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What is a Revocable Living Trust?

Living trusts have becoming an increasingly common and popular choice in estate planning in recent years because they offer a unique and smart way to protect your assets both while you are still capable of managing them and after you have passed away or fallen ill. A revocable living trust is a specific type of trust that differs from other trusts in important ways.

Trust versus Will

One of the main things a trust does is replace many of the functions of a will. You may still choose to have a will in addition to the trust to take care of any property that you do not incorporate into the trust. However, the main advantage of a trust as opposed to a will is that it does not need to be filed in probate court, which allows individuals a greater degree of privacy as there is no public record of all the assets in their possession.

A Revocable Living Trust

All trusts are entities into which one transfers their assets. The assets then become property of the trust rather than the individual. A revocable living trust is used so that individuals can put all of their property into a single location, allowing it to be distributed quickly and easily when the time comes for that process. The trust takes effect immediately, which is why it is called "living." The opposite type of trust is called a testamentary trust, and does not take effect until the person dies. At that point, their assets are transferred into the trust for disposal.

Controlling a Trust

In the meantime, most people choose to name themselves as the trustee as long as they are alive and competent, which means that they retain control over their assets even though the trust owns the assets rather than the individual. Revocable trusts can be changed, altered, or even dissolved at the discretion of the person who creates them as long as they are competent, at any time, and for any reason. In this way, this type of trust offers the greatest degree of flexibility while providing the degree of protection and privacy desired by people considering a trust.

To summarize, some of the advantages to a revocable living trust include:

- flexibility to change or dissolve the trust while you're alive

- Ability to serve as the trustee of your own trust

- Privacy because no will needs to be filed

- Savings after death because avoids the costs and delays of probate court

These flexible trusts are a great choice for many people. If you are interested in this or other options regarding trusts and estate planning, it is important to consult someone with knowledge and experience before making these important decisions.

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When to Update Your Will

I am often asked how often a Will should be updated. This is a fairly difficult question to answer because it differs. That decision should be made on a case-by-case basis. Ultimately, though, it should be updated any time you experience a life-altering event or when you feel it is out of date.

Here we will explore the most common times when you should be certain to update your Will. I would be remiss if I did not begin this article by saying that as soon as someone turns 18, he or she should immediately get a Will. It is important for everyone to have a Will regardless of how much money or property they have because if you die without a Will, it is often more expensive to probate an intestate estate (without a Will) than it is to probate an estate with a Will. Having a Will also ensures that your property is divided as you wish rather than how the state law believes you would want your property to be divided.

The first life-altering event that most people will have is a marriage. After you get married, in most states the law will automatically assume that your property will pass to your spouse after you die. However, this can often be complicated by children (especially children you had with someone other than your current spouse) or certain other things. To ensure that your spouse receives the property you want him or her to receive in the event of your death, it is extremely important for you to execute a new will in to ensure these wishes occur.

The next life-altering event that most people will come to is the birth of a child. You should update your Will after any child is born. If you do not create a new Will after every child, depending on how your previous Will was written, the law may treat children that were born after your current Will was executed differently than children that were born before the Will was executed. Also, depending on the language of your previous Will, the law may split the estate between your children and your spouse rather than giving everything to your spouse. This can be especially complicated if you have children from a previous relationship. Another reason to update your Will after you have a child is to specify exactly who should take care of your kids in the event that you and their other parent were to die. Your Will can define this for you. By putting this in your Will, you will help your family by preventing a custody suit after you die. Custody suits can be expensive and extremely emotional. They often end with bitterness and hurt feelings and is not the best thing for your children or other loved ones. Not to mention that you don't want a Court to decide the fate of your children when you have every opportunity to specify who you believe would be best to raise the kids.

The final life-altering event that people may experience is divorce. Although the law in most states will give nothing to an ex-spouse in the event you die before updating your Will to exclude him or her, it is best to go ahead and write a new will to completely eliminate your ex from the Will. This will not only ensure that he or she will not receive any property after your death, it will also state exactly how you do want your property distributed.

There are numerous other life-changing events after which you should write a new Will. I cannot cover all of those events in this article, but when they come along, you will know. Regardless of your situation in life, you definitely need a current Will which you keep updated any time your life changes or you change your mind about how to divide your property.


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Do You Always Need an Attorney to Complete a Divorce? Short Answer Is NO

Is a Do It Yourself - Divorce for you? That question should be asked and assessed early. There are pros and cons in every decision and information is critical.

To start the only time you really need an attorneys on either side is when it is contested. If you and your soon to be ex-spouse can agree on the terms of the divorce then an attorney is not necessary in most states. Simply you can do all the paperwork and negotiations yourself and then take it to court to be confirmed.

A divorce can be accomplished by completing the documents, filing with the court in your local jurisdiction and then serving the filed documents on the other party. Even if you both agree to the divorce the initial documents will need to be filed at your courthouse.

After doing so that starts the process. In most state there is a waiting period which I like to call a "cooling off" period. This waiting period gives time for the other party to contest and file the appropriate paperwork, time to negotiate and agree and maybe a time to reconcile.

It is important that you have a reason for the divorce when you file. You don't want to say "just because" that is not a reason. Keep in mind almost all states look at a marriage essentially as a contract and many contract laws come into play. So have a reason for the divorce.

The reason for divorce can be a subject onto itself which I will not go into in this article. But another type of divorce, depending on the state you live in, is a "no-fault" divorce. You don't need to point blame but just acknowledge the marriage is over and you will not likely get back together. I once had an attorney say that you can get caught cheating in bed and under a No-Fault divorce state that is irrelevant and is not even an issue in court.

As you might image that adultery and abuse is the main culprit in divorce filings. Adultery is self-explanatory but abuse comes in all shapes and sizes. They are verbal, sexual, physical, and emotional and so on. Either way you go you must be able to prove it. Don't just throw it out to hurt the other side because a judge will probe the reason for your claims. Shy of the spouse fully admitting it - a trial will proceed to either prove or disprove the claims.

It is a typical trial where each side has the right to question the other and to call witnesses and have those witnesses cross-examined.

Now if you complete your own divorce and your spouse is amenable then most of the work is done. After the waiting period the court will confirm and finalize the divorce under the terms agreed to in the court documents.

Once attorneys get involved on both sides watch out it will likely get quite expensive and often can drag on and on. So the alternative may just be a do it yourself divorce also know as DIY divorce which is cheaper and less contentious.

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By The People can help with Uncontested Divorce or Legal Separation. For couples who can resolve their own asset and debt division and/or child issues, we can prepare all of the necessary documents for you to obtain your divorce. We also do all of the filing and procedural work throughout the process.

707.428.9871

LLC FAQ's - If My LLC Business Goes Under, How Much Will I Lose?

One of the scariest times in the life of a business is its decline. This is usually due to a loss of revenue or customers. Costs rise and profits sink. If you are a business owner, particularly under an LLC, what happens to your business if it goes under?

If an LLC (or limited liability company) falls into bankruptcy, the business can enter a restructuring in Chapter 11 or for an immediate liquidation of assets, Chapter 7. In a chapter 7 filing, all of the LLC's assets are sold and the money gathered from that sale is then distributed between the creditors that are owed. If an LLC files Chapter 11, the company begins a restructuring process, aided by a court to dissolve the debt slowly and continue on with the business.

Fortunately, members of an LLC are only responsible for any debts that are incurred in the business name alone, and if filing for bankruptcy, a court will assist in settling all business operations. If the LLC is filing bankruptcy and has a personal guarantor, it will have an effect on the guarantor's credit rating and personally guaranteed debts can be reported on a credit report for up to 10 years.

Upon choosing whether to make your company an LLC, you may want to keep all of this in mind. You may not lose anything personally, but it can do harm to the credit of a guarantor. As an owner of an LLC, it's vitally important to do anything you can to prevent having to file Chapter 7 or Chapter 11.


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The Advantages of a California LLC Business Structure

As a business owner, deciding on the structure of your company is one of the most important decisions you can make. Limited liability companies are a relatively new hybrid business entity. California passed The Beverly-Killea Limited Liability Company Act which allowed for LLCs to be created in California in 1996. Since their start, they have become increasing popular with business owners and for good reason.

An LLC is an interesting hybrid that has the best of different business structures rolled into one. It is a business structure where, as with a sole proprietorship or partnership, the losses of the company are reported on the business owner's personal tax returns. Sole proprietorships and partnerships however, do not provide the owner any limited liability protection. With an LLC, as with a corporation, the owners are protected from personal liability.

Easier to Create and Maintain

An LLC has many advantages to the business owner. LLCs have all the advantages of a corporation (protection from personal liability), without the red tape and administrative costs in creating and maintaining a corporation. Because of this, they are a good option for the small business owner. Complying with corporate formation rules and the yearly maintenance that is needed is time-consuming and costly. There are statements and reports that need to be filed with the Secretary of State, and corporate books to be maintained. The stakes to maintaining a corporation are high, failure to do so means that a creditor of the corporation could theoretically "pierce the corporate veil" and come after the shareholder's assets.

In contrast, the creation of an LLC is simple. All that is required to form an LLC in California is to file Articles of Organization with the Secretary of State and pay a filing fee. California also requires that LLCs create an Operating Agreement. The Operating Agreement is a written agreement between the members setting the guidelines and procedures of how the LLC will function. While there are no set criteria as to what the document should contain, typically it would include subjects as how the company will be managed, the amount of capital contributions from each member, and how profits and losses will be handled.

Favorable Tax Treatment

The IRS has different ways of viewing an LLC for tax purposes. For instance, an LLC with only one member is taxed as a sole proprietorship. If the LLC has two or more members it will be taxed as a partnership (unless the LLC has been elected to be treated as a corporation). Either way, the tax treatment for an LLC is preferable to that of a corporation. In contrast, C-Corporations are subject to double taxation. The corporation is required to pay a corporate tax, and then the money is taxed again as income to the individual shareholders. With an LLC, all the business losses, profits and expenses flow through the company to the individual shareholders. This also holds true with a corporation that files for S-election status. The drawback however, is S-corporations are complicated and costly to create and maintain. Further, Section 1361 of the Internal Revenue Code imposes significant restrictions on the ownership of S-corporations.

Owner's Assets are Better Protected

Just as with shareholders of a corporation, LLC owners are protected from personal liability for business debts and claims. They are not individually liable for any debts or liabilities incurred while doing business for the company. Owner's assets cannot be seized or sold to pay other liabilities for the company. This is not the case with a sole proprietorship or partnership, where the owner is responsible for any loss or debt, even if it means settling this debt with their personal assets.

For these reasons, the LLC can be a great option for some, by combining the best features of different business structures. While the LLC is a great option for some, choosing the right business entity is a complicated process. When in doubt consult legal counsel.

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